Why LRR Energy's Shares Dropped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of LRR Energy dropped as much as 10% today after the company released earnings.

So what: Revenue dropped nearly 50%, to $15.8 million, and the company swung to a loss of $7.5 million, or $0.32 per share. Analysts had expected $28.4 million in revenue, and earnings of $0.13 per share.

Now what: Production is definitely falling behind expectations, and management expects full-year production to be between 6,250 and 6,550 Boe/day. The good news is that management is paying a $0.4825 per share distribution to shareholders who owned the stock yesterday. The company can't continue that distribution with these results, so I'd be cautious buying shares after the company lost money last quarter.

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The article Why LRR Energy's Shares Dropped originally appeared on Fool.com.

Fool contributor Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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